Shanghai shares at 11-week high on pension funds hopes; Hong Kong edges up

Reuters Staff

3 Min Read

* SSEC +0.3 pct, CSI300 +0.2 pct, HSI +0.1 pct

* Inflows from China pension funds will top $1 bln - media

* COFCO-controlled companies advance on restructuring hopes

SHANGHAI, Feb 21 (Reuters) - Shanghai stocks edged up on Tuesday morning to an 11-week high, as risk appetites were improved on hopes for big flows into stock markets from pension funds plus news that some companies have scrapped new share sales.

Market sentiment was lifted by announcements from some companies of scrapping or changing plans to issue new shares, in response to China’s securities regulator’s move to restrict “excessive” fundraising by listed companies.

Investors also found encouraging a Shanghai Securities News report, citing unidentified sources, that around 10 billion yuan ($1.45 billion) of pension funds is expected to enter the market by the end of this month.

Tian Weidong, analyst at Kaiyuan Securities in Xi‘an, said one part of the bullish sentiment fuelled by recent restrictions on fundraising and expectation of pension fund investment was offset by profit-taking.

“Investors lock in profit right after the index rose. Stocks to maintain their strength were mostly related to the ‘One Belt, One Road’ initiative,” Tian said.

“Pension funds will be the biggest source of incremental capital in the near future, and they would surely pick shares of industry bellwethers and consequently boost the blue-chips,” he said.

Companies controlled by Chinese food giant COFCO Corp rose after the parent said it would partially privatise all 18 specialized units by 2018, as part of restructuring reforms.